wall: the pension companies said they
needed a pension sharing order — some-
thing issued by the Family Court as part
of divorce proceedings.
They had only their deed of separa-
tion, so emailed the courts to ask how
they should proceed. They were still
waiting for a reply in October when Ian
had a stroke and collapsed at home.
Christine found him four days later, hav-
ing been contacted by his work, and
called an ambulance. Ian suffered
another stroke while in hospital and died
aged 60 three days later.
“It was incredibly traumatic,” Chris-
tine said. “I was with him until the end at
the hospital, then had to tell my kids that
their dad wasn’t coming home.”Christine
Bruce-Reid with
her dog, Souris.
Her ex-husband,
Ian, died in
Octobergives you 50 per cent of your career
income in retirement. To get the full
amount you need to pay contributions
for 41 years (rising to 43 for those born
after 1973). That’s still pretty good.
All this extravagance is onerous.
France now spends almost 14 per cent of
its GDP on pensions and has far higher
basic rates of income tax. We spend
about 5 per cent of our GDP on pensions.
International comparisons are hard.
What you can’t measure by raw numbers
is happiness. How good is the French
care system compared with ours, for
example? (My hunch is: much better.)
What I do know is that the French
system is unsustainable, and ours is on
a more even keel in terms of funding and
the balance between state and private
provision. The challenge for the UK is
making sure that remains, which is going
to be problematic with the death of final
salary pensions, which so many of
today’s pensioners rely on.
That is the reason so many baby
boomers have been able to retire early —
and it’s the reason I won’t be able to.
Radical solutions are needed to
encourage young people to save more.
Unfortunately no politician wants to
make those solutions because messing
around with people’s retirements can
lose you elections.I
n my brain I’m still 30 years old. I
can run for ever, stay up all night,
and eat whatever I want whenever
I want. In reality, I’m closer to 60
than 30. I strain muscles getting
out of bed, I doze off before News
at Ten and I can’t eat a doughnut
without getting a paunch.
Yet 30 feels like yesterday and
60 seems an eternity away. The
idea I might retire then is mind-boggling.
I’d probably think differently if I were
French. Marine Le Pen last week
described Emmanuel Macron’s plan to
raise the state retirement age from 62 to
65 as an “unbearable injustice”.
Macron had already been forced to
climb down on the issue. Retirement
policy wins and loses elections — just ask
Theresa May, whose reforms of social
care proved so incredibly damaging.
Yet reform of social care and state
pensions is a necessity. The UK state
pension age is 66, rising to 67 between
2026 and 2028 and then 68 by 2046
(although this could happen by 2039).
The reason many say our state
pension is so poor is because of a
measure used by the Organisation for
Economic Co-operation and
Development (OECD) known as the
replacement rate, which shows how
much of your earned income is replacedby the state pension when you retire.
Ours is 58 per cent, the OECD average
is 62 and France’s is 74. (Turkey’s is
103 — you get more in retirement than
in work.)
About half of our retirement income
comes from the state, about 35 per cent
from workplace pensions and the rest
from other savings. That seems about
right to me: the state provides the
backbone, which encourages you to take
personal responsibility for the rest.
Compare that with France where
there is almost no occupational pension
income, according to the OECD, so
85 per cent comes from the state.
The main public pension in France is
essentially a final salary scheme thatDo I have any chance of
retiring at age 62? Non!
James Coney
France
spends
almost 14%of GDP on
pensions
She sorted out Ian’s affairs and con-
tacted a probate solicitor for help with
the pensions, but was told she needed a
family law solicitor. She found one, who
told her it was a probate issue.
“Where am I supposed to turn? What
am I supposed to do?,” Christine said. “I
have no idea where I stand, and feel I’ve
been let down by our initial solicitors
back when we first separated.”The pensions problem
Pensions are often overlooked during
divorce settlements, despite being one of
the most valuable assets. Research by the
University of Manchester found that one
partner holds at least 90 per cent of the
pensions wealth for about 50 per cent of
couples. Divorced women in their late
sixties who live alone have only 30 per
cent of the pension wealth of divorced
men of the same age.
There are three main ways your pen-
sion assets may be divided in a divorce
settlement.
Pension sharing splits any retirement
funds at the time of divorce and is known
as a “clean break”, so each spouse takes
their share of the pots at that point.
Pension attachment (also known as
earmarking) leaves pensions intact at the
point of divorce but gives one spouse the
right to payouts from the other’s pot.I’m in
no man’s
land. I just
want whatwe agreed
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BAKING KEEPS
ME CALM... BUT
SO DOES LEGO
PAGE 16
My ex-husband died — and my
retirement plans went with him
C
hristine Bruce-Reid thought
that she had managed a fairly
straightforward divorce.
She and her husband of 17
years, Ian, had split up on
good terms and moved just
down the road from one
another so that they could
share time with their two
teenage children.
“It was all amicable,” said Christine,
55, “We remained good friends, it just
wasn’t right to be together any more.”
But three years later she found out that
the divorce had been a little too straight-
forward after Ian’s untimely death left
Christine facing retirement without a
proper pension.
When Christine and Ian split up in
February 2019, couples who did not want
to assign blame to one partner in a
divorce had to separate for two years
before they could start proceedings.
Christine and Ian divided their finances
50:50 and signed a deed of separation
with their solicitors, which sets out how
assets and responsibilities will be
divided. These deeds are sometimes used
before divorce or by couples who want to
separate without formally divorcing.
They are not legally binding, so a court
could overturn one if it was unfair, but it
is less likely to do so if both parties had
legal advice while drafting the deed.
“We wanted to make sure that every-
thing was clear and signed so we, and the
children, could move on instead of wait-
ing two years for the divorce,” said Chris-
tine. They sold the family home in
Oxfordshire, splitting the proceeds
equally, and bought separate houses in
Guildford. Savings were also divided.
In March last year, having separated
for the required two years, they began
divorce proceedings and three months
later signed the decree absolute, which
confirms a marriage has officially ended.
All the finances had been sorted
except for Ian’s pensions, which were
worth about £450,000. Christine left
work after their first child was born 16
years ago, so does not have much pen-
sion provision of her own. They wanted
to split the pension 50:50 but hit a brickIt has become easier
to get a divorce, but don’t
forget your pension inyour haste to separate,
warns Imogen Tewess will mean that more couples fail to
consider their pension assets. Laura
Thursfield from the accountancy firm
Mazars said: “There is the risk that peo-
ple prioritise childcare, property settle-
ments or cash deposits, underestimating
the long-term value of pension benefits.”
When you get divorced, you do not
have to go through any legal formalities
to divide your finances, but if you fail to
get a financial settlement rubber-
stamped by the courts your spouse could
make a claim against you in the future.
The simplest way to get a binding
financial settlement is through a consent
order, where a solicitor sets out the
agreed arrangements that are then
approved by a judge. A pension sharing
order would be part of this consent order.
“It would be unfortunate if a by-prod-
uct of the new system is even more unfair
sharing of wealth — in particular of pen-
sions, Isas and other investments,” said
Rowan Harding from the adviser Path
Financial. “Anyone facing divorce should
look closely at their finances.”
Christine finally got an answer about
her pension. One of the pension compa-
nies has agreed to pass on half of Ian’s
fund to her and the other half to their
children. She is still waiting to hear from
the other two pension firms.
She said: “I’ve been in a no man’s land.
I thought we had done everything right.
I just want what Ian and I had agreed
when we separated.”Both require a pension sharing court
order.
The final way of sharing a pension is to
offset it against other assets. For exam-
ple, you could agree to keep your
£200,000 pension while your ex keeps
your £200,000 property.
“It sounds superficially attractive, but
the valuation of a pension and a house
can be quite different,” said Jim Richards
of the law firm Winckworth Sherwood.
Pensions have become more valuable
due to soaring stock markets. The S&P
500, the main US index, is up 212 per cent
since 2012 and the FTSE 100 is up 33 per
cent. While house prices have also rock-
eted, particularly in the southeast of
England, there is every chance that a pen-
sion will be a couple’s largest joint asset.All change
Divorce law has undergone its biggest
overhaul in half a century with the
Divorce, Dissolution and Separation Act,
which came into effect on April 6. It
means couples no longer have to sepa-
rate for two years and can get a “no fault”
divorce. You can apply individually or
jointly, and wrap up everything within
about six months.
In the first full week after the rules
came into effect about 3,000 couples
applied for a divorce, according to the
Ministry of Justice. Last year the average
number of applications was 2,072 a week.
But some fear that the new faster proc-